According to a new study this week housing prices are up in half the major US cities, a sign that the prices may be stabilizing. The Standard & Poor’s /Case-Shiller index published Tuesday shows that prices increased in August from July in 10 of the 20 cities that were followed. The fifth straight month that at least half of the cities showed gains each month.
The cities with the biggest price increase were in Washington, Chicago and Detroit. The cities that fared the worst were in Atlanta and Lost Angeles.
The data from August suggests, possibly, that there may be a glimmer of hope and that some markets in the US have bottomed out – finally. According to David M. Blitzer the August data provides a small “glimmer of hope” that some areas have bottomed out and are actually turning around. He went on to say that cities in the Midwest including Chicago, Detroit and Minneapolis, have shown strength since May.
“We certainly believe the bulk of the decline in housing is behind us and indeed, one might even say that ‘housing’ is more likely to improve from here,” said Dan Greenhaus, chief global strategist for BTIG. “But given the overwhelming level of inventory that remains on the market … further price declines seem almost assured to help clear the market.”
Even though there is a glimmer of hope, there is also trepidation. Many believe that the backlog of homes entering into the foreclosure process will bring down the average cost of homes once again. There are still millions of homes out there that are facing foreclosure.
While home prices are down from the boom years and interest rates are at historical lows, people are still reluctant to make a large purchase and for those who are willing to try again some, actually many, aren’t able secure a traditional mortgage.
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